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Asian Infrastructure Investment Bank
News: Recently, former Reserve Bank of India (RBI) governor Urjit Patel has been appointed vice-president of the Beijing-based Asian Infrastructure Investment Bank (AIIB). In October 2021, the Union Minister of Finance participated in the 6th Annual Meeting of the Board of Governors of AIIB.
• It is a multilateral development bank with a mission to improve social and economic outcomes in Asia.
• It aims to connect people, services and markets that over time will impact the lives of billions and build a better future by investing in sustainable infrastructure and other productive sectors.
• It is established by the AIIB Articles of Agreement (entered into force December 2015) which is a multilateral treaty.It is headquartered in Beijing (China) and began its operations in January 2016.
Achievements of AIIB:
• AIIB began operations in 2016 with 57 founding Members (37 regional and 20 non regional). By the end of 2020, it had 103 approved Members representing approximately 79% of the global population and 65% of global GDP.
• Since 2017, AIIB has received AAA ratings with a stable outlook from the top credit rating agencies— Standard & Poor’s, Moody’s and Fitch.Industry recognition of its sound financial standing has enabled it to expand its presence in international capital markets.
• In 2018, AIIB was granted Permanent Observer status in the deliberations of both the United Nations General Assembly and the Economic and Social Council, the two development-focused principal organs of the global body.
• AIIB has created an effective environment for its Board of Directors to take a strategic approach to direct and oversee the work of an accountable management.The Bank’s Accountability Framework is an innovative governance model that positions AIIB to embed a culture of accountability throughout the organization.
• Strategies for all major infrastructure sectors and for investing in equity, mobilizing private capital and financing operations in non regional members have all been approved and being implemented.
AIIB and India:
• The AIIB has approved more loans for India than any other member of the bank.China is its biggest shareholder and India is the second-largest.The AIIB has funded 28 projects in India amounting to USD6.7 billion.It has recently emphasised green projects and supporting public health initiatives during the Covid-19 pandemic, besides infrastructure.
• In October 2021, India applied for loans from the AIIB and Asian Development Bank (ADB) to procure 667 million doses of Covid-19 vaccines with the ADB expected to lend USD1.5 billion and the AIIB around USD500 million, under the ADB’s Asia Pacific Vaccine Access Facility (APVAX) initiative.
• Last year (2021), the AIIB also approved a USD356.67 million loan to the Indian government to support the expansion of the Chennai metro rail system.